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Breaking Down the Walled Garden

Apple is to closed what Google is to open. This was always thought to be a common understanding among wireless developers, but — as it turns out — the dichotomy isn't that clear. From the point of view of a developer charged with prioritizing dozens of application stores and standing out among hundreds of thousands of other developers, openness takes on different meanings. And while it has certainly opened doors, it has also opened up a new set of challenges.

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In the early days of mobile app development, just getting a meeting with a carrier could take six to nine months and deployment could take a year more, said Peter Farago, vice president of marketing for Flurry Analytics. Developers had to pitch their app, it had to be accepted, often modified and ported across all handsets, and a business model had to be worked out. In traditional carrier environments, there were no options for pricing outside of a few pre-determined price points. And there was no choice of handsets. It had to span their entire portfolio.

“Apple came in and fixed all that and has been the most successful combination of [original equipment manufacturer] and storefront manager, basically economy-builder in wireless,” Farago said. “It is funny they are being reamed for being un-open. You can submit an application for approval, and it only takes a few weeks. You don't have to know anybody.”

What open has meant is that anyone, including the typical ‘guy-in-his-garage’ example, can be a developer and have an equal shot of making it on to an app store. Following Apple's success, nearly every handset-maker, carrier, software provider and third party has entered the app store market in some form, giving developers more outlets than ever before. Most notable was Google and its Android operating system (OS), which although criticized for limiting access to its software development kit, has positioned itself as the beacon of transparency.

Concrete examples of what has changed as a result of this emphasis on open is the revenue share split and the speed by which apps get to market, said Chetan Sharma, president of Chetan Sharma Consulting. The industry standard used to be 30% to 50% going to developers, and now the common practice is 70/30 in favor of the developers. If an app gets enough volume, it will likely evolve to an 80/20 spit, he said. In terms of speed to market, it can be a matter of days now. “In that respect, more developers are excited about building apps for the mobile ecosystem,” he said.

While excitement has risen, it's no secret that some big developers preferred the preferential treatment of a more closed system. Opening up access to a carrier or OEM platform means it's truly open for all. Developers of every size, financial backing and prowess have the potential to compete. Difficulty getting discovered has been a common byproduct.

Social game developer Digital Chocolate is platform-agnostic, but as a relatively small developer of 80 games, it has had to pick and choose where to focus its efforts, said CEO Trip Hawkins. Currently, it is partnered with Verizon, AT&T, Vodafone, Google, Nokia, Samsung and Sony Ericsson. While its leading competitors include Electronic Arts, Gameloft, I-Play and Glu Mobile, it has also found itself up against thousands of other games currently offered in app stores.

“If there's a fixed amount of retail shelf space, there's a reason why a big company with big brands has the ability to push the smaller and more innovative companies out of the way for more space,” Hawkins said. “That is going to limit the growth and evolution of the market. Since we are one of the smaller and more innovative companies, that will discriminate against us. We don't care for that model.”

To address issues like this in the app developer space, Jai Jaisimha left AOL Mobile to start an open-source initiative, Open Mobile Solutions. Developers don't care about the OS, he said, they just want to reach people. Likewise, consumers buy devices based on their functionality, not the OS. Jaisimha started OMS to make it easier for developers to build apps that can run on lots of devices. He is setting out to outline the essential platforms for developers — the best-of-breed providers for design, development, testing, porting, distributing, marketing and monetizing — and to create a marketplace for mobile app developers to form relationships. Jaisimha said that openness has changed the process because instead of focusing on how developers can make friends with Verizon, for example, the question has become how can Verizon befriend that developer.

“To a developer what it means is that all the sudden [operators] say they are open, but there is so much underlying complexity to take advantage of that new-found openness, which is about accepting content in a low-friction way,” Jaisimha said. “It still gives people pause because you have that ‘Gee, you are willing to accept my app, so I don't have to spend six months trying to get you to meet with me,’ but I think that is the stage we are all in. We want to take advantage of it; there is a lot of underlying complexity, and there are only a small number of people who have the decoder link today. But if you're new to mobile, you can crack that open.”

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© 2014 Penton Media Inc.

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